Market punishes security breaches severely

Professor Huseyin Cavusoglu found that "The announcement of an Internet security breach is negatively associated with the market value of the announcing firm. Breached firms, on average lose approximately 2.1% of their market values within two days surrounding the events. This translates into $ 1.65 billion average loss in market capitalization per incident." This and many other findings have been recently published in International Journal of Electronic Commerce. His study co-authored with S. Raghunathan and B. Mishra has been regarded as the most rigorous study that uses event study methodology. More.